Solstice Advanced Materials to Acquire Element Solutions for $14.5 Billion

By Greg Peters • Monday, July 06 16:02 • Permanent Link

Solstice Advanced Materials agreed to buy Element Solutions in a cash-and-stock deal valued at about $14.5 billion, including debt, in a move that would create a larger specialty materials company with heavier exposure to electronics and AI infrastructure.

The combined company would have about $6.8 billion of 2025 net sales and a 26% adjusted EBITDA margin, including run-rate synergies, according to the companies. Solstice said the deal is expected to be accretive to adjusted EPS in year one.

Under the terms, Element shareholders will receive $10.00 in cash and 0.500 shares of Solstice stock for each Element share, implying about $50.10 per share and a 15% premium to Element’s closing price on July 2. Element holders would own about 44% of the combined company.

Solstice said the transaction would deepen its electronics business across semiconductor fabrication, packaging and assembly, while expanding thermal management for chip and data center cooling. It also said the combined company would have broader exposure to AI infrastructure, data center cooling and refrigerant application solutions.

The company expects more than $180 million of net synergies by the third year after closing, driven by procurement, manufacturing, supply chain, operational and SG&A savings. Solstice also said it expects mid-to-high single-digit annual revenue growth, high-single-digit to low-double-digit adjusted EBITDA growth and about 75% cash conversion over the medium term.

At closing, Solstice expects net leverage of about 3.5 times adjusted EBITDA, with a target of below 3 times within 18 months. The company said it intends to keep a target leverage range of 2.0 to 3.0 times adjusted EBITDA.

The deal is expected to close in the first half of 2027. Solstice said it has secured a $4.7 billion bridge commitment from Goldman Sachs to help fund the cash portion of the purchase, alongside cash on its balance sheet and permanent debt financing to replace the bridge. The market has reacted to these announcements by moving the company's shares -4.33% to a price of $41.75. For the full picture, make sure to review Element Solutions Inc's 8-K report.

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